The S&P/ASX 200 Index (ASX: XJO) experienced a modest increase of 0.56% yesterday, yet two notable stocks faced significant declines. Zip Co Ltd (ASX: ZIP) and GQG Partners Inc. (ASX: GQG) saw their share prices drop by 7.6% and 8.6%, respectively. Investors are now questioning whether this decline presents a buying opportunity amidst the sell-off.
Analysis of Zip Co Ltd’s Decline
Zip Co Ltd, a prominent player in the buy now, pay later (BNPL) sector, experienced a sharp drop in its share price, falling over 7% yesterday. This decline appears to have stemmed from profit-taking, as no major news affected the company. In the preceding six months, Zip shares had surged more than 27%, driven by strategic growth initiatives.
Despite the downturn, analysts suggest that this could be a prime opportunity for investors to consider purchasing shares. The company’s fundamentals remain intact, with no alterations in guidance or forecasts. Analyst ratings reflect this sentiment; Macquarie has maintained an “outperform” rating and a price target of $4.85 for Zip shares, indicating a considerable upside from yesterday’s closing price of $3.28.
Furthermore, data from Commsec indicates projected earnings per share (EPS) of 7.9 cents for fiscal year 2026, increasing to 12.1 cents in fiscal year 2027. TradingView projects an average one-year price target of $5.45 for Zip, suggesting an upside potential of over 66%.
GQG Partners Inc. Faces Challenges
GQG Partners Inc. also encountered a difficult trading day, with its share price plummeting by 8.6%. This drop followed the announcement of its Funds Under Management (FUM), which stood at US$163.9 billion as of 31 December 2025, up from US$153.0 billion the previous year. However, the company reported net outflows of US$2.1 billion in December 2025, leading to negative annual net inflows. This news likely contributed to investor hesitance and the subsequent sell-off.
Despite these challenges, GQG could present a buying opportunity following its 8% decline. Macquarie has set a price target of $2.50 for GQG shares, suggesting an upside of more than 52%. Additionally, for income-seeking investors, the projected yield of approximately 12% in the coming years adds to the stock’s appeal.
Investors considering these opportunities should approach with caution. While the recent declines may signal a chance to buy at lower prices, it is crucial to evaluate the underlying fundamentals and market conditions before making investment decisions.
This analysis encourages potential investors to weigh the risks and rewards carefully. As noted by investing expert Scott Phillips of Motley Fool, there may be other stocks that present stronger opportunities at this time.
